The number of US grocers fell by roughly 30% from 1993 to 2019, according to a report last year by Food & Water Watch, a consumer advocacy group.Īnalysts say that Kroger and Albertsons are likely to close some of their overlapping stores, particularly in some cities where they are heavily concentrated, such as Los Angeles and Chicago.
Grocery stores in the United States are on the decline. This is an important strategy for these stores because it’s more profitable to sell their own brands than national labels, and it helps keep big brands’ prices in check.īy merging, the companies plan to expand their own brand selection and lower production costs. The two companies’ brands generated a combined $43 billion in sales last year. Kroger, for example, offers its own brands such as Private Selection and Simple Truth, while Albertsons has O Organics, Open Nature and others. Kroger and Albertsons have each been building out their own exclusive food brands in recent years as alternatives to big-name brands. “A Kroger-Albertons deal would squeeze consumers already struggling to afford food,” said Sarah Miller, the executive director of the American Economic Liberties Project, a policy group against concentrated economic power. Mergers in less concentrated markets are most often associated with price decreases, the study found.Īntitrust advocates say the merger would force out competition and concentrate power among the largest chains, driving up prices. “With Aldi, Lidl and other discount grocers coming in, this positions Kroger to drive the market forward.”īut supermarket mergers can also lead to higher prices for shoppers.Ī 2012 study published in the Journal of Economics and Management Strategy found that “mergers in the supermarket industry can result in significant increases in consumer prices and thereby harm consumers” in highly concentrated markets. “This deal could provide some food pricing relief for consumers,” said Ken Fenyo, a retail analyst at Coresight Research. Grocery store prices aren't coming down anytime soon (Photo by Ting Shen/Xinhua via Getty Images) Ting Shen/Xinhua/Getty Images People shop at a local supermarket in Washington, D.C., the United States, Sept. “Our expanded portfolio, along with more personalized promotions and benefits, will help customers save… and help to relieve the inflationary pressures facing shoppers across the country,” Kroger CEO Rodney McMullen said Friday.Īlbertsons stores are concentrated more on the West Coast, while Kroger is dominant in the Midwest.Īlbertsons has higher prices than Kroger and other grocers, analysts say, and they predict Kroger will try to reduce Albertsons prices to be more competitive against discount chains like Aldi. They will also invest $1.3 billion in Albertsons, including on lowering prices. The companies say that they will be able to use $500 million in cost savings from the deal to reduce prices for shoppers and tailor promotions and savings. Grocery prices increased 13% in September over the last year, the fastest pace in decades. Prices at the grocery store are a major concern for shoppers right now. Here’s how the mega-merger could impact grocery shopping in America.
The companies say they will divest hundreds of stores in areas where they overlap to win regulatory approval. Bernie Sanders and Elizabeth Warren, have already called on regulators to block the deal. The merger will face intense scrutiny from the Federal Trade Commission and other regulators. There’s no guarantee the deal will go through, however. A Kroger-Albertsons merger could reshape the grocery industry.
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